Investment in new Technology is growing at a faster rate than at any time since 2006, but digital skills shortages risk holding companies back - CIO Survey 2014

More organisations are reporting increases in investment in technology than at any time since 2006 as business confidence returns and companies act fast to play catch up on their digital offering.

This is according the 16th annual Harvey Nash CIO Survey, representing the views of more than 3,200 Chief Information Officers (CIOs) and Technology leaders from across more than thirty countries, with a combined technology spend of over $160bn. The Survey is one of the largest and most comprehensive polls of technology leaders in the world.

As the global economy begins to recover, organisations are ramping up their investment in digital, mobile and online which has had a further knock on effect in the growing skills shortage, with almost two-thirds of companies reporting that lack of access to the right technology talent is holding back their digital strategy.

Record optimism

Technology budgets are growing as Chief Executives increasingly favour investing for growth over cost reduction and efficiencies. Newly created roles within companies are evolving to lead digital growth, such as the emergence of the 'Chief Digital Officer' and the increasing influence Chief Marketing Officers have over technology related spend.

Budget growth: Forty six per cent of CIOs and Technology leaders experienced budget growth in the last twelve months, up from 42 per cent last year, and the highest level of budget growth since 2006 (where 47 per cent of Technology leaders experienced budget growth).

CEO priorities changing: Almost two-thirds of CEOs (63 per cent) now prioritise projects that generate cash (such as digital marketing, customer oriented systems and innovation led projects) over projects designed to deliver cost savings or improve operational performance. As business confidence improves, CEOs are shifting their attention away from cost saving (their top survey priority for five years between 2009 and 2013) to using technology to improve the effectiveness of their operations (top priority in 2014).

Emergence of Chief Digital Officer: Seven per cent of organisations now employ Chief Digital Officers, a position that until recently did not exist, rising to 16 per cent for companies with technology budgets of $100m and over. CIOs are now less likely to have a direct role in shaping the digital strategy, with 50 per cent playing an active role in 2014, down from 56 per cent last year.

New projects and priorities are creating skills shortages:

For the first time since the recession, the skills shortage is once again appearing as a major management concern. In Asia, for example, the problem is particularly acute. Retaining, developing and acquiring the skills to drive the growth program are now major priorities for leaders all over the world.

Big jump in skills shortage: Faced with new projects and shifting priorities, sixty per cent of Technology leaders (60%) are experiencing a skills shortage within their teams preventing their company keeping up with its competitors. This is up from 45 per cent last year, and represents the biggest increase since the survey started tracking this area in 2005.

Regional differences: Leaders in Asia are most worried about skills shortages; however, in every region at least half the leaders polled voiced a similar concern.

Retention of talent a concern: Ninety per cent of CIOs and Technology leaders were concerned about retaining their best people, while 35 per cent were 'greatly' concerned. Larger companies (250 technology staff or more) are 46 per cent more likely than smaller companies (less than 50 technology staff) to be 'greatly' concerned; suggesting that in the Technology sector smaller, high growth companies are more attractive to talented Technology professionals.

Emphasis on 'doing' skills: Change management and Project management skills are in greatest demand followed by hands-on software development skills and IT strategy.

"After six years of sluggish activity, this report clearly shows that 2014 is a watershed year. CIOs and Technology leaders are seeing growing budgets and growing prominence in their organisation as CEOs are turning to technology to drive growth. However, significant challenges lie ahead. This year has seen a worrying increase in the number of leaders citing concerns about skills shortages. To be successful, organisations will not only need a clear technology strategy, but they will also need the right people to deliver it."

NOTES TO EDITORS

About the research:

(i) The Harvey Nash CIO Survey 2014 collected data between 6th January and 19th April 2014 and represents the views of 3,211 technology leaders from more than 30 countries, with a combined IT spend of $160bn. Of the respondents, 34 per cent identified themselves as CIOs, 8 per cent as CTOs, 36 per cent as director / VP in technology and the remaining 22 per cent were spread across a broad range of other roles including CEOs and COOs.

About Harvey NashEstablished in 1988, Harvey Nash has helped over half the world's leading companies recruit, source and manage the highly skilled talent they need to succeed in an increasingly competitive, global and technology driven world. With over 7,000 experts in more than 40 offices across Europe, Asia and the USA, we have the reach and resources of a global organisation, whilst fostering a culture of innovation and agility that empowers our people across the world to respond to constantly changing client needs. We work with clients, both large and small, to deliver a portfolio of services: executive search, professional recruitment and IT outsourcing.